On
October 16, 1891, outside the True Blue Saloon in Valparaiso, Chile, a
brawl between American sailors and Chilean nationals resulted in two
American sailors killed, 17 wounded (five seriously), and many arrested.The incident sparked a diplomatic crisis that lasted for months,
occasionally threatening war between the two countries, until a
settlement was reached in early 1892.The featured cartoon blames Patrick Egan, the U.S. minister to
Chile, by portraying him as a mischievous boy who has cranked up a
menacing Jack-in-the-box, which wields a sword labeled “Chilian War
Scare.”

Tension in the U.S.-Chilean
relationship dated back at least a decade to the tenure of James G.
Blaine as secretary of state under Presidents James A. Garfield and
Chester Arthur (March-December 1881).Blaine had supported Peru against Chile in the War of the Pacific
(1879-1884), charging that Chile’s military aggression was encouraged
by Great Britain.Hoping to
enhance American trade in Latin America, Blaine criticized British
economic interests in Chile.Chileans
nationalists shared Blaine’s anti-British sentiment, but distrusted
the American secretary’s motives.Chile and the United States were also on a collision course
because influential elements in each hoped to make their respective
country the dominant power in South America.

In March 1889, President
Benjamin Harrison (1889-1893) named Blaine secretary of state.Blaine was pleased to find that the new Chilean president, José
Manuel Balmaceda, was seeking to undermine British influence through a
nationalistic campaign of “Chile for Chileans.”To further “twist the [British] Lion’s tail,” the secretary
of state named Patrick Egan as the U.S. minister to Chile.Egan had fled Ireland in 1882 when the British government issued
an arrest warrant against him for alleged crimes committed in the
service of Irish independence.In
the United States, Egan obtained American citizenship and backed the
political aspirations of Blaine (who was the Republican
presidential
nominee in 1884).

When civil war erupted in Chile
in early 1891, the United States threw its support to the Balmaceda
government, while Britain backed the rebel faction called the “Congressionalists”.In May 1891, the U.S. government responded to a request from
the Balmaceda government to apprehend a rebel Chilean ship, the Itata,
which had loaded a shipment of arms in San Diego, California.The Congressionalists won the civil war, and the Harrison
government released the ship in July and recognized the new Chilean
government in August.

Tensions remained high,
however, and the U.S. Navy Department considered contingency plans in
case of war.Part of the
friction stemmed from Egan’s grant of asylum in the American mission
to several leaders of the defeated Balmaceda faction.By October, only 15 of the original 80 refugees remained at the
mission, but Egan refused an order from the Chilean government to
surrender them.In
response, the Chilean secret police surrounded the building to prevent
the refugees’ escape.

On October 16, the captain of
the U.S.S. Baltimore gave shore leave to 117 American sailors in
Valparaiso, Chile’s second most populous city and an important port.Later that day, an altercation between an American sailor and a
Chilean sailor escalated into a riot involving numerous sailors,
boatmen, longshoremen, and townspeople.Both sides blamed the other for initiating the violence, but
American sources suspected a planned assault on American sailors.

President Harrison, already
angered by the refugee dispute, became furious over the Baltimore
affair.The United States
government demanded “prompt and full reparation,” but the Chilean
foreign minister, Manuel Matta, promised nothing until the judicial
process was completed.Secretary
of State Blaine, who had been absent since May due to illness, returned
to duty on October 26 and, to his critics' surprise, urged caution and
patience during the diplomatic crisis.

The situation cooled somewhat
for several weeks until a war of words erupted in early December.In his annual address to Congress, President Harrison blamed
Chile for the Baltimore affair and criticized the “offensive
tone” of Chilean foreign minister Matta.Navy Secretary Benjamin Tracy echoed the president’s
sentiments.Matta responded
publicly on December 11 by declaring that the American government was
insincere, wrong, and bellicose.That further incensed Harrison, and Egan broke off
communication with the Chilean government, which intensified its
surveillance of the American mission.

Harrison stepped back from the
brink of war when Blaine insisted that no additional demands be made
immediately on Chile, and when a newly installed Chilean administration
replaced Matta on January 1, 1892, with a more conciliatory foreign
minister, Luis Pereira.Pereira met cordially with Egan, the secret police were
removed from the American mission, and the refugees were allowed to
leave the country without arrest.On
January 8, a Chilean court indicted three Chileans and one American for
their involvement in the Baltimore affair.

With an end to the diplomatic
dispute in sight, on January 20 the new Chilean government ineptly
called for the removal of Egan as U.S. minister.Harrison, this time with Blaine’s approval, sent a strongly
worded message to Chile, rejecting the Chilean court’s findings,
calling the Baltimore incident a deliberate attack on uniformed
American servicemen, refusing to discuss Egan’s position, and
demanding “a suitable apology and … adequate reparation for the
injury done to this Government.”

On
January 25, the Chilean administration, warned by European ministers
that the Americans were poised for war, conceded all points.In February 1892, a Chilean court handed down prison sentences
for the three indicted Chilean rioters, and in July the Chilean
government offered to pay the United States $75,000 in reparations,
which the Harrison administration accepted.Egan remained as the U.S. minister until fired by President
Grover Cleveland in 1893 after he again offered asylum during another
Chilean civil war.